Problema Solution
Suzie deposits $150 per month beginning at age 23. How much will she have when she turns 40 if she earns 9% annual interest compounded monthly?
Answer provided by our tutors
P = $150 the principal invested
r = 0.09 or 9% annual interest rate
t = 40 - 23 = 17 years
n = 12*t = 12*17 = 204 compounding periods (the account is compounded monthly)
A = future value
A = P(1 + r/12)^n
A = 150(1 + 0.09/12)^204
A = $688.78
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Suzie will have $688.78 when she turns 40.